[2024] New INTE exam dumps Use Updated ISM Exam
Verified INTE Dumps Q&As - INTE Test Engine with Correct Answers
NEW QUESTION # 55
An organization purchases materials beyond current and anticipated requirements in expectation of a price increase or shortage, in the hope that it will profit from the sale of the materials at a later date. This describes which of the following buying strategies?
- A. Forward
- B. Spot
- C. Speculative
- D. Consignment
Answer: C
Explanation:
Speculative buying occurs when an organization purchases more inventory than necessary based on the forecasted increase in prices or potential shortages. This strategy aims to capitalize on market conditions, potentially resulting in financial gains. Reference: Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management.
NEW QUESTION # 56
XYZ, Inc. notices that one of its suppliers has been failing to achieve on-time delivery, even though XYZ sends it a 6-month projected order forecast every month. The supplier claims that it takes nine months to receive important raw materials, and that this causes the poor delivery performance. Nevertheless, XYZ must continue purchasing from this supplier, as it is a sole supplier. Given this situation, which of following is the BEST course of action for XYZ to take?
- A. Extend the forecast timeline from six months to one year, and request the supplier purchase raw materials based on the projections
- B. Discuss the issue with engineering to determine if the firm can use different raw materials to manufacture the product
- C. Send the 6-month forecast data weekly instead of monthly to the supplier, and request it purchase raw materials based on the projections
- D. Request that the supplier submit an open order report on a weekly basis with details on the latest shipment status
Answer: A
Explanation:
Extending the forecast timeline from six months to one year and requesting the supplier to purchase raw materials based on the projections is the best course of action. This approach aligns the supplier's lead time for raw materials with XYZ's requirements, improving on-time delivery performance. Reference: Supplier relationship management and strategic forecasting.
NEW QUESTION # 57
A graph of a firm's inventory replenishment system reveals the following:
Which of the following is TRUE'
- A. There is near instantaneous replenishment.
- B. The order cycle is two and a half days.
- C. The average inventory is 1,850 units.
- D. There is a fixed order quantity of 500 units.
Answer: A
Explanation:
The graph shows inventory levels being replenished back to the maximum level immediately after reaching zero, indicating near-instantaneous replenishment. This is characteristic of a system where the lead time for orders is very short or negligible, allowing the firm to maintain optimal inventory levels without significant delay. This approach minimizes stockouts and ensures a con-tinuous supply of inventory. References:
*Stevenson, W. J. (2018). Operations Management. McGraw-Hill Education.
*Silver, E. A., Pyke, D. F., & Thomas, D. J. (2016). Inventory and Production Management in Supply Chains.
CRC Press.
NEW QUESTION # 58
A supply manager is reviewing safety stock for a particular unit. The unit is small, Inexpensive, non-perishable, and easily stored, but is critical to the firm's manufacturing process. The following information is known about this unit:
Maximum lead time = 8 Days
Average lead time = 3 Days
Maximum daily usage = 6,000 Units
Average daily usage = 4,000 Units
What is the maximum safety stock that should be maintained for this unit?
- A. 12,000
- B. 10,000
- C. 48,000
- D. 36,000
Answer: D
Explanation:
The maximum safety stock is calculated using the formula: (Maximum lead time - Average lead time) x Maximum daily usage. This results in (8 - 3) x 6,000 = 30,000 units. Adding the average usage during average lead time (3 days x 4,000 units = 12,000 units) gives a total of 36,000 units for safety stock. References: Safety stock calculations help in managing inventory to prevent stockouts during lead time variations.
NEW QUESTION # 59
Which of the following is a key requirement of xRP7
- A. Should-cost data
- B. Supplier consolidation
- C. Data integrity
- D. Smoothing algorithms
Answer: C
Explanation:
Data integrity is essential for any extended Resource Planning (xRP) system. Accurate and reliable data ensures effective planning, decision-making, and resource allocation across the supply chain. Maintaining data integrity minimizes errors and supports overall operational efficiency.
NEW QUESTION # 60
A company would like to reduce its inventory. The firm's investment in inventory represents 12% of the company's $11 million total assets. The inventory carrying cost is 20%. An inventory reduction of $1 million is considered a feasible goal. What impact would meeting this goal have on profit?
- A. $120,000
- B. $220,000
- C. $200,000
- D. $240,000
Answer: C
Explanation:
Reducing inventory by $1 million with a carrying cost of 20% results in savings of $200,000. This reduction directly impacts profit by decreasing the costs associated with holding inventory. References: Inventory management principles highlight the significance of inventory reduction in improving profitability through lower carrying costs. Calculation: $1,000,000×0.20=$200,000\$1,000,000 \times 0.20 =
\$200,000$1,000,000×0.20=$200,000.
NEW QUESTION # 61
A company develops long range material forecasts, analyzes industry trends, determines commodities for value analysis, and assesses supplier capabilities to assure continual economic supply of goods and services.
This company is engaged in
- A. supply chain mapping
- B. inventory control
- C. market intelligence
- D. early supplier involvement
Answer: C
Explanation:
Market intelligence involves gathering and analyzing information about the industry, suppliers, and market trends to ensure a steady supply of goods. It helps companies make informed decisions about commodities and supplier capabilities. This process supports long-term strategic planning and cost management, ensuring the business remains competitive. Key references include supply chain management literature emphasizing the role of market intelligence in proactive procurement strategies.
NEW QUESTION # 62
A distributor receives orders from a customer for the following parts:
PO1801: 6 pcs of Item #XYZ-06
3 pcs of Item #XYZ-09
PO1802: 3 pcs of Item #XYZ-09
Item #XYZ-06 is currently out of stock. The shipping manager contacts the customer, who gives authorization to ship the available parts and back order the rest. What is the line count fill rate for the customer?
- A. 25%
- B. 66%
- C. 33%
- D. 50%
Answer: B
Explanation:
Anticipation inventory is material accumulated for a well-defined future need, such as seasonal demand or planned promotions. It helps companies prepare for expected spikes in demand. References: Inventory management literature emphasizes the role of anticipation inventory in aligning stock levels with future market requirements.
NEW QUESTION # 63
A company finds that tracking demand for products sold at its retail outlets makes forecasting a challenge.
Which of the following would be MOST useful in providing rapid updates when dealing with suppliers?
- A. Regression analysis of future sales
- B. Probability modeling
- C. Safety stock review
- D. Point-of-sale system
Answer: D
Explanation:
A point-of-sale (POS) system would be most useful for providing rapid updates when dealing with suppliers.
POS systems capture real-time sales data, allowing for accurate and timely tracking of demand at retail outlets.
This information aids in precise forecasting and inventory management, facilitating better supplier communication. Reference: Retail management and technology integration in supply chains.
NEW QUESTION # 64
A manufacturer of gardening products has many international suppliers. Because of extended lead-times and logistical concerns, it is critical that the company provides accurate seasonal demand planning data to its suppliers. Given this situation, which of the following types of feedback from the supplier would be MOST critical to the manufacturer?
- A. Anticipated production schedules and capacity planning
- B. Planned delivery schedules
- C. Price increases on key components
- D. Notification of any constraints to meeting demands
Answer: D
Explanation:
For a manufacturer reliant on accurate seasonal demand planning, awareness of potential constraints from suppliers is crucial. This feedback allows the manufacturer to adjust plans and mitigate risks, ensuring a smooth supply chain operation. Effective communication and proactive problem-solving are essential in managing supply chain uncertainties.
NEW QUESTION # 65
A firm engaging in low-cost country sourcing wants to assume the least amount of risk when importing goods into its own country. Which of the following Incoterms 2020 rules would be MOST useful in achieving this goal7
- A. CFR
- B. DAP
- C. CPT
- D. EXW
Answer: B
Explanation:
In the context of low-cost country sourcing and minimizing risk when importing goods, the selection of appropriate Incoterms 2020 rules is crucial.
DAP (Delivered at Place) is the most suitable Incoterm for a firm wanting to assume the least amount of risk.
Under DAP, the seller is responsible for all costs and risks associated with delivering the goods to a specified destination, which includes transportation, export customs clearance, and any other logistical arrangements until the goods are made available for unloading at the buyer's location. This significantly reduces the buyer's risk as the seller handles most of the transportation and logistics.
Other Incoterms, such as:
* CFR (Cost and Freight): The seller pays for the cost and freight to bring the goods to the port of destination. However, the risk is transferred to the buyer once the goods are loaded on the vessel.
* CPT (Carriage Paid To): Similar to CFR, but can be used for any mode of transport. The seller covers transport costs to a specified destination, but the risk transfers to the buyer upon handing over the goods to the first carrier.
* EXW (Ex Works): The buyer assumes all risks and costs from the seller's premises onward, making it the highest risk for the buyer.
References:
* Incoterms 2020 by the International Chamber of Commerce (ICC)
* "A Guide to Incoterms 2020" by the International Trade Centre (ITC)
NEW QUESTION # 66
Selection of a supplier takes place during which of the following phases of the project management process?
- A. Project execution
- B. Project monitoring and control
- C. Project initiation
- D. Project planning
Answer: D
Explanation:
In project management, supplier selection typically occurs during the project planning phase. This phase involves defining the project's scope, setting objectives, and identifying necessary resources, including suppliers. References to the PMBOK Guide support that procurement planning and supplier selection are integral components of project planning.
NEW QUESTION # 67
Based on the global reach and complexity of supply chains, resiliency planning and risk assessment are necessary because of which of the following'
- A. Uncollected receivables
- B. Natural and man-made disasters
- C. Lack of training within the organization
- D. Supplier bankruptcies in competitive markets
Answer: B
Explanation:
Resiliency planning and risk assessment in global supply chains are critical due to the potential impact of natural and man-made disasters. These events can disrupt operations, affecting logistics, supply continuity, and financial performance. Effective risk management strategies mitigate such disruptions, ensuring supply chain stability.
NEW QUESTION # 68
Which of the following refers to the percentage of order requirements met through stock that is present on the shelf?
- A. Fill rate
- B. Lead time
- C. Inventory turnover
- D. Buffer stock
Answer: A
Explanation:
The fill rate refers to the percentage of customer order requirements met directly from stock on hand. It measures the effectiveness of inventory management in fulfilling customer demand without delays, thus indicating the availability of products on the shelf.
NEW QUESTION # 69
Reducing the number of items that perform the same or similar function is known as
- A. value engineering
- B. simplification
- C. value analysis
- D. standardization
Answer: D
Explanation:
Standardization involves reducing the variety of items performing similar functions. This process streamlines inventory, reduces costs, and simplifies procurement by focusing on a limited range of products. It supports efficiency and cost management in supply chain operations, as referenced in supply chain management best practices.
NEW QUESTION # 70
Which of the following requires investment recovery action'
- A. Finished goods
- B. Raw materials
- C. Slow-moving materials
- D. Work-in-process
Answer: C
Explanation:
Investment recovery focuses on recouping value from obsolete or excess inventory. Slow-moving materials often require such actions to minimize losses and free up resources. This practice is part of effective inventory management and resource optimization strategies.
NEW QUESTION # 71
A manufacturer of gas-powered motors realigns its supply chain to fit a new business segment. In the past, the firm focused on customized designs. Now, it wishes to compete in the electric motor market, which is highly competitive and price-sensitive. Given this situation, which of the following will ensure that the firm has the proper planning in place?
- A. Requiring suppliers to verify that sustainability metrics for various programs are closely monitored
- B. Working with engineering and suppliers to develop new product designs
- C. Working with engineering to ensure the inclusion of customizable product and service features, in order to meet customer demands
- D. Negotiating prices with suppliers with a focus on total cost of ownership models, to minimize inventory and logistics costs
Answer: D
Explanation:
In a price-sensitive and competitive market, focusing on total cost of ownership is critical. By negotiating with suppliers to minimize inventory and logistics costs, the firm can better control expenses and remain competitive. This approach ensures proper supply chain alignment with the new market segment's demands.
NEW QUESTION # 72
A supply manager wishes to implement an enterprise resource planning (ERP) system. During which phase of the system development process should the supply manager communicate with end users to review their business environments?
- A. Maintenance
- B. Testing
- C. Analysis
- D. Design
Answer: C
Explanation:
During the analysis phase of an ERP system development process, the supply manager should communicate with end users to review their business environments. This phase involves gathering detailed information about user requirements and business processes to ensure the ERP system will meet organizational needs. It's crucial for identifying gaps and ensuring user buy-in. References: ERP implementation methodologies emphasize the importance of user engagement during the analysis phase to align system functionalities with business operations.
NEW QUESTION # 73
To ensure items frequently employed in production are immediately available for Kanban replenishment, a storage location is established specifically for these items. This inventory location is known as a(n)
- A. point-of-use location
- B. fixed location
- C. overflow location
- D. random location
Answer: A
Explanation:
Point-of-use storage refers to the placement of inventory close to where it is needed in production. This approach supports just-in-time and Kanban systems by ensuring materials are readily accessible, reducing handling and transit times. Reference: Lean manufacturing principles emphasize minimizing waste, and point-of-use storage is a key strategy.
NEW QUESTION # 74
At the beginning of each year, a large firm's indirect procurement organization holds a brainstorming session.
These sessions produce many great ideas and foster support among the procurement team. However, after a few years, support for the brainstorming sessions begins to diminish, and the projects discussed are pushed aside in order to deal with more pressing issues. In this situation, which of the following would be the BEST course of action to take?
- A. Discontinue the brainstorming sessions and urge employees to make improvements within their areas of responsibility as they see opportunities arise
- B. Ask other functional areas to suggest improvement projects, and dedicate resources to support these initiatives
- C. Assign functional project managers to work on the brainstorming project
- D. Create a center of excellence with select managers committed to implementing the ideas discussed in the brainstorming sessions
Answer: D
Explanation:
Establishing a center of excellence helps maintain focus on innovation, ensuring that ideas from brainstorming sessions are prioritized and executed effectively. This approach aligns resources and creates accountability.
Reference: Kaplan, R. S., & Norton, D. P. (2006). Alignment: Using the Balanced Scorecard to Create Corporate Synergies.
NEW QUESTION # 75
A company purchases raw materials from a domestic supplier that offers competitive overland transportation rates. The firm requires the goods be delivered to its manufacturing plant. Which of the following Incoterms
2020 rules should be used if the firm wants risk to transfer at the manufacturing plant?
- A. DAP
- B. FOB
- C. FCA
- D. CIP
Answer: A
Explanation:
DAP (Delivered at Place) specifies that the seller bears all risks and costs until the goods are delivered to the specified location, in this case, the manufacturing plant. This ensures risk transfer at the point of delivery.
Reference: Incoterms 2020 by ICC.
NEW QUESTION # 76
DEF, Inc. is in the ramp-up phase of a unique medical device. The device has a two-year life expectancy. The sales forecast for the ramp-up period is as follows:
MonthJulAugSepOctNovDecJanFeb
Unit Sales1001502006001,4002,2004,00010,000
Demand after February is expected to remain at 10,000 units per month for several months, then decrease gradually. The units are small, and thus maintaining an inventory of up to 10,000 units is possible.
There are only three suppliers capable of providing the specialized component critical to this product. The production capacities of these suppliers are as follows:
*Supplier X has a capacity of 500 units per month at a cost of S20 per unit, representing 80% of its total business
*Supplier Y has a capacity of 2,000 units per month at a cost of S2O.5O per unit, representing 50% of its total business
*Supplier Z has a capacity of 20,000 units per month at a cost of $20.70 per unit, representing 10% of its total business Two of these companies-Supplier X and Supplier Y-are minority businesses.
Given this situation, DEF should contract with
- A. Supplier Z only, as it can best fulfill the forecasted demand
- B. all three companies in a tiered system, with up to 40% from Supplier X and Y's total monthly business, and the remainder going to Supplier Z
- C. Suppliers X and Y, and work with them to increase their production capability
- D. all three companies in a tiered system, with up to 5,000 units from Supplier X, 20,000 units from Supplier Y, and the remainder from Supplier Z
Answer: B
Explanation:
Contracting with all three suppliers in a tiered system allows DEF, Inc. to diversify its supply chain, supporting both minority businesses and ensuring capacity to meet demand. This strategy balances cost, supplier diversity, and risk management, aligning with best practices in supply chain management.
NEW QUESTION # 77
......
ISM INTE Exam Syllabus Topics:
| Topic | Details |
|---|---|
| Topic 1 |
|
| Topic 2 |
|
| Topic 3 |
|
| Topic 4 |
|
| Topic 5 |
|
Pass Your INTE Dumps as PDF Updated on 2024 With 168 Questions: https://examcollection.dumpsvalid.com/INTE-brain-dumps.html